During the 2012 Legislative Session, Governor Mark Dayton invited leaders of the Latino
community, including Senator Patricia Torres Ray, Representative Carlos Mariani, John Keller
and Luz Maria Frias, to organize a job summit to identify practical ideas to increase economic
prosperity and create jobs for Latinos in Minnesota.
In response to the Governor’s invitation, Senator Torres Ray convened a series of meetings with
The Minneapolis Foundation, The Northwest Area Foundation, The Immigrant Law Center of
Minnesota and community experts to develop a practical report with key policy
recommendations.
Five key policy priorities were identified as a result:

Expand educational opportunities for young Latinos.

Increase access to capital for small business development and growth.

Review economic status and social conditions of Latinos in rural communities.

Improve Latino business participation in State/Public Contracts.

Expand trade opportunities between Minnesota Latino businesses and Mexico and other
Latin American countries.

Latinos in Minnesota: Demographic Overview
Demographic data and projections
Economic impact of Latinos in Minnesota
From Lake Street in Minneapolis to Worthington, Latinos have contributed tremendously to
Minnesota’s economy by starting businesses and working in areas once considered desolate or
void of minority-owned businesses. According to the Minnesota Department of Employment and
Economic Development, the State’s labor force participation rate for Latino workers is 83.8%,
the highest of any ethnic group in the State, and well exceeding the national rate of 68.8%.2 The
Selig Center for Economic Growth ranks Minnesota among the ten top states in terms of growth
rate in Latino buying power. Latino buying power in Minnesota is currently at $5.1 billion, an
unbelievable 909.5% increase since 1990.3
1 http://www.census.gov/prod/cen2010/briefs/c2010br-04.pdf
2http://www.positivelyminnesota.com/Business/Locating_in_Minnesota/Education_Workforce/Workforce_Overvi
ew.aspx3 http://www.immigrationpolicy.org/sites/default/files/docs/ipc/images/infographics/Minnesota.pdf

The Latino population is growing at a rapid pace locally and nationally. In Minnesota, the
Latino population increased over 74% from 143,382 in 2000 to 250,258 in 2010. As of 2010,
Latinos accounted for 4.7% of the population in the state.1
By comparison, according to 2010 census figures, the Caucasian population in Minnesota had
the slowest growth rate at 11%.

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Latino entrepreneurship rates and job creation
In 2007, the U.S. Census Bureau’s Survey of Business Owners indicated there were 5,011
Latino-owned firms in Minnesota4, a 25.8% increase over the 3,984 reported in 2002.
Latino Impact in Rural Minnesota
rural school administrators acknowledge that some public schools in their communities
would be shuttered but for the enrollment of Latino students.8
Moreover in Southwest Minnesota alone, Latino workers generated $45 million in state and local
taxes in 2000 and added nearly $500 million to the economies of South-central Minnesota,
through labor force contributions, consumer spending, and increased demand by employers for
regionally supplied goods and services.9
Unemployment data
Latinos are highly regarded for their hard work ethic; however, there are still a considerable
number of unemployed Latinos in Minnesota. In 2011, the unemployment rate in the general
population in Minnesota was 6.3%, while the unemployment rate among Latinos was 8.6%10 and
5.9%11 among the Caucasian population.
Disparities in Minnesota are not confined to unemployment rates. In 2010, the overall poverty
rate in Minnesota was 11.6%. Of that, the poverty rate among the Caucasian population was
8.4%, while the poverty rate among Latinos was 24.4%12. These figures highlight the need to
close the unemployment gap as well as the income disparities gap.
4 http://www.census.gov/econ/sbo/get07sof.html?11 (Table C)5 http://www.immigrationpolicy.org/just-facts/new-americans-minnesota6 http://www.hhh.umn.edu/people/kfennelly/pdf/eco_impacts_report_2010.pdf7 http://www.ruralmn.org/wp-content/uploads/2010/04/Latinoeducationreport.pdf8 http://www.ruralmn.org/wp-content/uploads/2010/04/Latinocommunities.pdf9 http://www.mncompass.org/_pdfs/Immigration_Report_Summary_web.pdf10 http://www.dol.gov/_sec/media/reports/HispanicLaborForce/HispanicLaborForce.pdf11 http://www.epi.org/publication/ib322-african-american-latino-unemployment/12 http://minnesotabudgetbites.org/2011/09/22/racial-disparities-grow-in-minnesota-as-poverty-increases-
household-income-declines/#.UHMAik2knpg

Latino

businesses comprise approximately about 16% of all minority-owned businesses in the state;

employing nearly 6,000 people and having sales of more than $1.6 billion, an increase of 248%

since 2002.5 Latino businesses have become an engine of growth for our local economy.

Since 2001, approximately 75% of all school districts in Minnesota have experienced a decline

in enrollment, with particularly severe decreases in rural districts.6 Contrary to the general trend,

Latino student enrollment has increased by more than 38% overall.7 Acutely aware of per-pupil

Education is a top priority for Latinos. There is consensus among Latinos that economic
prosperity is directly tied to academic attainment. However, Latino students are more likely than
their peers to drop out of school and become underemployed. In Minnesota, the achievement
gap between Latino students and their Caucasian peers has remained constant in the last decade.
Specifically, high school completion and high school graduation rates among Latinos are the
second lowest in the state. For the 2011-2012 school year, 7.1% of the enrolled population in
Minnesota were Hispanic, totaling 59,625 students. Out of those enrolled in high school, the four
year graduation rate is 50.5%. This is the second lowest graduation rate in the state compared to
83.4% for Caucasian students and 49.1% for Black students. Of the remaining 49.5% of Hispanic
students, 24.8% are still working on their high school diploma after four years, 13.5% dropped
out, and 11.1% had no available information.
Recommendations:
The State of Minnesota must prioritize high school graduation and college enrollment among
Latino students.
The Governor should adopt a goal to increase the high school graduation rate of
Latinos from 50% to 80% by the year 2018.
Proposed Solutions:
1. The State of Minnesota should create a program to offer Latino students the opportunity to
work while attending high school. According to a report by the Bill and Melinda Gates
Foundation, 32% of young people who dropped out of school said they left school because
they had to earn money to support themselves or their families. According to anecdotal
information from parents and teachers from key districts in the State of Minnesota, Latino
students, particularly male, are leaving high school because of a financial necessity to
contribute to their family’s household income.
To respond to this challenge Minnesota should:
A. Create opportunities for high school internships in the public and private sectors e.g.,
the Minnesota Department of Natural Resources, Minnesota Department of Health, and
Minnesota Department of Human Services should create a fund to train and hire high school
and college interns. Students participating in these internship programs should make a
commitment to obtain their high school diploma and enroll in a post-secondary institution
as an eligibility requirement of their internship.

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B. The State Demographer has projected a workforce shortage as a result of the Baby
Boomer wave of retirements. Current retirement projections in different state agencies
should be reviewed and goals should be adopted to replace those individuals with diverse
staff. Given the changing demographics of our state, the Governor should adopt serious
goals to hire an increased bilingual and diverse workforce.

The Minnesota Office of Higher Education and technical colleges should expand their
resident tuition rates to include Deferred Action for Childhood Arrivals (DREAMers) and
increase financial aid options for Latino students, regardless of their immigration status.

The Administration should review the criteria for funding youth employment programs.
Many programs receive funding to refer students to employment opportunities that don’t
exist. The State needs to invest in creating employment opportunities, not simply investing
in referral and training programs. Agencies such as the Minnesota Department of
Employment and Economic Development (DEED) need to pursue more funding to open
employment opportunities for youth, especially youth living in poverty. Young people want
to work and most of them are likely to acquire and advance their working skills on the job.
Improve access to higher education.

The State of Minnesota needs to increase Latino student participation and enrollment in higher
education. The Minnesota Department of Education needs to better monitor school districts’
efforts to increase Latino student participation in college credit programs. Colleges and high
schools that establish partnerships to enroll large number of Latino students in college credit
programs should receive incentives/rewards.
2. Increase Access to Capital for Small Business Development
and Growth
Background:
The Latino entrepreneurial spirit is well known and appreciated in Minnesota. We need to build
on the assets that exist in the Latino community. There are significant numbers of small
businesses owned by Latinos across the state. According to the Metropolitan Economic
Development Association (MEDA), people of color and immigrants who own businesses tend to
hire people of color and immigrants at a rate 7 times higher than majority owned businesses.
The Latino Economic Development Center (LEDC), the Neighborhood Development Center
(NDC), the Metropolitan Economic Development Association (MEDA), and other organizations
that work with immigrant owned businesses have documented that Latino business owners are
more likely to hire individuals who are under skilled and less fluent in English, opening
opportunities so that these individuals will be prepared to enter the broader labor market.
Latino-owned businesses in the United States increased by 43.7 % to 2.3 million, more
than twice the national rate of 18.0 % between 2002 and 2007. In addition, 89 % of

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Latino-owned businesses are operated by single owners 13 with small startup capital.
According to a 1992 Characteristics of Business Owners survey, 59 % of Hispanic-
owned businesses require less than $5,000 of startup capital.14
Latino owned businesses represent the highest percentage of businesses within the low
barrier sectors and low-technology sectors; the lowest percentage of businesses within the
medium and high-technology sectors compared to Asian, Black and Caucasian owned
businesses.15
Prior wealth is vital for Latinos to start a business because it is almost always the unique
source.16 Latinos were significantly more likely to use informal funds (such as from
family, friends) compared to Caucasians.17 In addition, it is argued that in the U.S, Latino
business owners used substantially fewer formal funds compared to Caucasian.18
In Minnesota, the Urban Initiative Loan Program dispersed a mere 3% of its loans in
2010 to Latino owned businesses.
Compared with the rest of the country, Minnesota has one of the highest percentages of
employer based health insurance (78% in 2010)19 and a very low rate of uninsured
14 U.S. Bureau of the Census 199715 Ruben O. Martinez et al., 2011; Bates et al., 201116 Survey (2004) in Iowa showed that 88% of Latino business owners used their own money for startup capital while
only 24% used loans from bank or credit union17 Rate of Latino businesses utilized informal funds was 22.5% compared to 14.7%, 21.9% and 21.8% of
Caucasian, African and Asian owners, respectively. Ruben O. Martinez et al., 2011. See more Granier, 2006;
Onochie & Lee, 2008; Raijman & Tienda, 200018 Haynes, Onochie, & Lee, 2008; Cavalluzzo & Wolken, 2005; Grnier, 2006; Blanchard, Zhao, & Yinger, 2008.19 U.S. Census Bureau, Current Population Survey, 2009 to 2012 Annual Social and Economic Supplements

African American
Latino
Asian American
22%
Latino
3%
3%

American Indian
White (male/female/couple)
54%

18%

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population (about 9% in the period 2007-2011).20 Nevertheless, access to health
insurance coverage is highly inequitable across ethnicities. A surprising 19% of the
uninsured were Latinos, despite the fact that Latinos make up roughly 4% of the State’s
population.21 Data also showed that only 10.7% of Latinos are covered by their
employers, compared to 72.2% of non-Latino Caucasians.22
Recommendations:
Improve access to capital and expand Latino business growth by:
Implementing innovative microfinance models through community based lending
institutions. These programs should focus on borrowers who have little or no credit and
should not require collateral.
Helping Latino businesses expand coverage of employer-sponsored health insurance.
Establish a working group to help small businesses understand the federal health credit
for small business and other opportunities to expand health coverage to business owners
and their employees.
Establishing a cross-agency office to provide one-stop shop services to small businesses.
The state should contract with culturally specific community based agencies such as the
Latino Economic Development Center to provide increased practical/technical support to
businesses in areas such as licensing, training, translation and connection to existing
opportunities.
Creating incentives for commercial banks to encourage immigrant lending as well as
strictly enforcing the Community Reinvestment Act.
Expanding the Urban Initiative Program loan fund. The Urban Initiative Board should
develop a strategy to increase access to loans to Latino owned businesses that
proportionately represent the population. Increased culturally responsive lenders and loan
requirements that reflect the reality of Latino owned small businesses are additional
strategies to consider.
Increasing DEED’s focus on and commitment to minority business development.
20 U.S. Census Bureau, 2010 American Community Survey21 MDH & School of Public Health, 2008.22 The Henry J. Kaiser Family Foundation. www.statehealthfacts.org quoted in CLAC Fact Sheets Series Health
care/ Summer 2009 page 1

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3. Economic Growth in Rural Communities
There are many Latinos working on rural farms in Minnesota. Workers from these farms are
very skilled in their trade but are often isolated and underpaid. Centro Campesino and other
organizations are working very effectively to connect farm workers with one another to provide
training and support. Latino farm workers have also expressed a desire to become farm owners
and apply their knowledge in areas such as organic farming. The State should develop effective
strategies to support Latinos working in rural communities.
4. Improve Participation in State/Public Contracts
This sector presents a challenge and an opportunity. Contracting with minorities is proscribed by
law, but the state lacks oversight. The state should increase the monitoring and oversight of
these laws as well as outreach to expand opportunities for Latinos. One strategy would be to
expand the Commissioner of Human Rights’ capacity to oversee and enforce this area.
5. Expand trade opportunities between Minnesota and Mexico as well as other Latin
American countries.
The State of Minnesota should recognize the opportunities available to and from Latin America
and create a stronger Latin American trade program. This program should work with Latino
entrepreneurs to maximize the trade potential between Minnesota, Mexico and other Latin
American countries. The program should explore trade missions, seminars, professional
exchanges, workshops and cultural exchange.